Can You Have Two Health Insurance Coverages?

Having more than one health insurance policy simultaneously is permissible and common. Many individuals find themselves covered by multiple plans, a situation that can arise from various life circumstances. This arrangement, often referred to as dual health coverage, allows for a structured approach to healthcare benefits.

What Dual Health Coverage Means

Dual health coverage refers to having two or more health insurance plans active at the same time for the same individual. This is a legitimate arrangement. Approximately 13% of the U.S. population has more than one medical insurance plan. People often obtain dual coverage through employment, family situations, or government programs.

This type of coverage can offer advantages such as potentially reducing out-of-pocket costs and providing access to a broader network of healthcare providers. For instance, one plan might offer better coverage for specific treatments or medications that another does not.

How Coordination of Benefits Works

When an individual has more than one health insurance plan, a standard process called Coordination of Benefits (COB) dictates how these plans interact. COB rules determine which plan pays first, known as the primary payer, and which pays second, the secondary payer.

The primary insurance plan is responsible for processing the claim first and paying its share according to its policy terms and coverage limits. After the primary plan has paid, any remaining eligible balance is then submitted to the secondary insurance plan. The secondary plan may then cover some or all of the remaining costs, depending on its own benefits, deductibles, copayments, and coinsurance rules.

Specific rules determine which plan is primary. If an individual has coverage through their own employer, that plan is primary, and a plan through a spouse or parent would be secondary. For dependent children covered by both parents’ plans, the “birthday rule” applies. Under this rule, the plan of the parent whose birthday month and day occur earlier in the calendar year is primary, regardless of the birth year. If both parents share the same birthday, the plan that has provided coverage for a longer period becomes primary.

In situations involving Medicare, the determination of primary versus secondary coverage depends on factors such as the individual’s employment status and the size of the employer. If an individual is 65 or older and still working, and their employer has 20 or more employees, the employer’s health plan is primary, and Medicare is secondary. However, if the employer has fewer than 20 employees, Medicare acts as the primary payer. Healthcare providers must verify these COB rules to ensure accurate billing and avoid delays or denials.

Typical Situations for Dual Coverage

Dual health coverage often arises from common life events and employment scenarios:

• Spousal coverage, where both partners have health insurance through their respective employers and choose to be covered under each other’s plans. In such cases, an individual’s own employer plan is primary for them, and their spouse’s plan acts as secondary.
• Medicare and private insurance. Individuals aged 65 and older eligible for Medicare may also maintain private insurance, such as through an employer or a Medigap policy.
• Young adults under 26. Dual coverage can occur if they are still covered under a parent’s health plan while also enrolling in their own employer’s plan. In this instance, the young adult’s own employer-sponsored plan is primary, and the parent’s plan would be secondary. Children of divorced parents may also have coverage from both parents’ plans, where the birthday rule applies to determine the primary insurer.
• COBRA continuation coverage from a previous employer while also starting a new job with new health benefits. During this temporary overlap, the active employee coverage from the new job is primary.
• An additional plan from the Health Insurance Marketplace. Some individuals might also have an employer plan and choose to purchase an additional plan from the Health Insurance Marketplace.

Managing Multiple Health Plans

Effectively managing two health plans requires understanding how they interact beyond just claims processing. Having dual coverage does not mean deductibles or out-of-pocket maximums simply combine or disappear. Each plan has its own deductible, and the primary plan’s deductible must be met before it begins paying. The secondary plan may then contribute towards remaining costs, including some deductible amounts, depending on its specific benefits.

Individuals with dual coverage should carefully review the Explanation of Benefits (EOB) statements from both insurers. These documents clarify how each claim was processed and what each plan paid. This review helps in understanding the financial contributions of each plan and any remaining patient responsibility.

The cost of premiums is a consideration when maintaining multiple health plans. Paying for two sets of premiums can be substantial, and the financial benefit of reduced out-of-pocket expenses must outweigh these ongoing costs. While dual coverage can offer financial protection and broader access to care, it can also lead to increased administrative complexity, including additional paperwork and potential delays in claims processing.